US lawmakers examining payment system modernization pointed to India's Unified Payments Interface (UPI) as a successful model for private-sector innovation in digital payments. According to reports from Zee News, the comparisons came during a hearing of the House Financial Services Committee's Subcommittee on Financial Institutions on Wednesday, where lawmakers debated whether the United States should modernize its regulatory framework to give qualified non-bank payment companies direct access to the Federal Reserve's payment infrastructure instead of relying on traditional banking intermediaries.
Eileen O'Mara, Vice Chair at Stripe, highlighted India's digital payments success during the congressional hearing. As reported by Zee News, she told lawmakers that countries that have opened access to payment infrastructure have seen significant innovation, citing both Brazil and India. O'Mara noted that the UK opened access in 2017 and the EU in 2024, with real results achieved. She emphasized that UPI in India operates on an even larger scale and is run by the National Payments Corporation of India, processing billions of transactions each month. Congresswoman Rashida Tlaib also highlighted India's digital payments success, contrasting it with the US system and noting that large-scale payment systems offering free instant transactions are already a reality for millions of users.
The hearing focused on whether the United States should create a dedicated federal payments charter allowing regulated fintech companies such as Stripe to access Federal Reserve payment rails directly, rather than operating through a patchwork of state licenses and banking partners. According to Zee News, O'Mara argued that the existing framework was designed around whether a company is 'a bank or you're not a bank,' while payment firms operate under a different business model. She explained that payment companies like Stripe do not take deposits and do not lend, advocating for regulation based on their actual business activities of payment processing. O'Mara specifically noted that while the United States has the FedNow instant payment system, it lacks a product layer on top — exactly what payment companies like Stripe would build, with the direct access that could drive significant adoption.
Tara Flynn of the National Community Reinvestment Coalition urged lawmakers to ensure that any non-bank receiving access to the banking and payments system should be subject to strong consumer protections, community investment obligations and rigorous regulatory supervision. As reported by Zee News, the hearing reflected a broader debate in Washington over how to modernize America's payment infrastructure without weakening safeguards built into the traditional banking system. Members from both parties agreed that faster, more efficient payments are becoming increasingly important as digital commerce expands, but differed on how far access to the Federal Reserve's payment system should be extended.
